Communist societies in the twentieth century

Marx saw advanced communism as a synthesis of naturalism and humanism, ‘the genuine resolu- tion of the conflict between man and nature and between man and man’ 1977, p. 97. While the state — like money — institutionalises and there- fore symbolises alienation, a sharing and caring society would involve social empowerment and organisation based on consensus decision-making. Communism would represent a degree of con- scious social control of interactions, both between people and between them as a society and nature, that cannot exist in capitalism. Marx’s vision of a stateless, moneyless and classless society was aimed to encourage the fullest development of human consciousness and creativity. There are few detailed visions, let alone experi- ments in socialism that have phased out the mar- ket and the state entirely. However, the theoretical ideal of ‘nonmarket socialism’, of a cooperative, sharing and caring society that has dispensed with money and the state, has various adherents. Current limitations and possibilities for such a scenario are discussed by ‘nonmarket so- cialists’, socialists who acknowledge the impor- tance of new relationships of exchange, nonmonetary exchange Rubel and Crump, 1987. In the nonmarket socialists’ vision, production is not for sale and work is not remunerated via the market. What is produced and how it is produced is decided collectively. Work is a sought creative right. The social product is shared freely and consumption subject to social constraint. Crump, 1987in Rubel and Crump, 1987 shares Marx’s belief that advanced capitalist technologies provide a step to creating the material basis for socialism. While admitting the need for ‘tempo- rary measures’, Crump believes it necessary to make a ‘great leap’ to socialism. He roundly rejects efforts to construct a transitional society and believes that socialism must exist worldwide. The common goal of nonmarket socialists is a diverse, united, global, human community. While nonmarket socialists present thoughtful ideas about the principles and values which might give order and organisation to nonmarket social- ism, they tend to assume abundance. They often ignore environmental limits that imply that all the needs and desires of all people cannot be freely and generously met. Although Bordiga Buick in Rubel and Crump, 1987 admits limitations on consumption, not just social limitations, but also environmental ones, his undemocratic political style is controversial. In short, the readings in Rubel and Crump 1987 do not indicate that alternative, nonmarket plans for production and exchange are necessarily more environmentally sensitive than capitalism. However, the removal of the capitalist impetus to produce and exchange to make money and focus instead on use values and human needs theoretically has the potential to avoid environmental threats associated with capitalism discussed above. Most nonmarket socialists argue for wholesale revolution and stress the integrity of economics and politics in a ‘logic of sharing’. Their ideas include interesting alternatives involving direct ex- change and labour vouchers and accounting with ‘physical’ units, like labour hours. But this is all highly theoretical. We have few empirical exam- ples of widespread experimentation in the area of nonmonetary exchange in modern societies. They include a period, towards the end of Allende’s socialism, in some districts of Chile and certain locales during the Spanish Civil War in the 1930s. The Cuban and Russian case studies are discussed in the following section.

6. Communist societies in the twentieth century

In the early years of Soviet power there was serious discussion amongst the party elite about instituting a moneyless economy. A debate about diminishing the role of money in Cuba occurred in the mid 1960s too. In both discussions serious social issues regarding monetary evaluation and calculation were raised. However, neither discus- sion gave any importance to evaluating and calcu- lating environmental resources and services in terms of ecological sustainability. Nevertheless, both cases indicate that policies involving price setting and nonmonetary exchange must be feasi- ble and gain popular consent to succeed. It seems reasonable to suggest that difficulties encountered in efforts to improve social justice via price controls would need to be considered by ecological economists attempting to encourage change using similar methods. Policies commonly mooted amongst environmentalists involve cut- ting and more evenly distributing work hours; reducing consumption or introducing rations; and setting prices to reflect or express environmental rationalities. Minority thrusts in the Russian and Cuban socialist movements argued for nonmone- tary exchange but the practical focus was on alternative ways of using monetary systems to rationalise production and exchange. Rather than offering any clear way forward for ecological economists bent on pricing the environment, these case studies act as important cautionary tales. In neither the Bolshevik nor the Cuban exam- ples did the revolutionaries adequately theorise or plan for how socialist exchanges would differ from market evaluation and behaviour. The difficulties of finding socially just and practical forms of exchange were thrust on the revolution- aries and weren’t resolved. They were ill prepared for these difficulties in terms of theory and, once exchange became a practical issue, they were deeply divided over what ways socialist exchanges should be conducted, particularly over how far to, or in what ways to, dispense with money. These difficulties were ones of psychology, of social be- haviour and political control; they were not sim- ply technical or economic. 6 . 1 . The neglect of money under ‘ war communism ’ The Russian case opens all the main conceptual as well as practical issues surrounding exchanges based on socialist values, issues that have some parallels in discussions about ecological values. Aspects of social justice and ecological sustain- ability are comparable and sometimes even coin- cide; they both involve incomparable qualities, complex processes and diverse consequences. How do we compare and measure differences in work efforts, different work, different people doing it, and products being produced in different ways? Assessing and economising on human labour can be compared with calculating and measuring effi- ciencies in varieties of nonhuman energy expendi- ture. Are monetary values useful to do this? If not, is socially necessary labour time best mea- sured in units of time or calorific energy or what? And, how is the question of needs addressed? After the October revolution in 1917, the Bol- sheviks initially adopted ‘strict financial ortho- doxy’ and continued to use the printing press to meet their financial needs Carr, 1966. 3 At the first All-Russian Congress of Councils of Na- tional Economy, May 1918, financial matters were openly debated. The Right’s protagonist, Gukovsky, demanded gold support for paper money ‘so long as we have money in circulation’. The Left was unconcerned about introducing what seemed to be a temporary measure because ‘when the full triumph of socialism occurs, the ruble will be worth nothing and we shall have moneyless exchange’. Sokolnikov welded these views into a practical position; gold was signifi- cant for foreign transactions but unnecessary for national ones. He also suggested that fixing or stabilising prices would counteract the ill-effects of too much money in circulation. Meanwhile the state was to be supported by monetary taxes. Initially the Bolsheviks aimed to control distri- bution but shop ‘workers’ weren’t organised and consumers’ cooperatives were inadequately super- vised. The state set prices but because neither the disturbed market nor new state initiatives to mo- nopolise trade and ration products were effective, speculation spread and a black market started to flourish. The civil war prompted a set of economic steps known as ‘war communism’. The note-print- ing presses were enlisted; money steadily became valueless. This depreciation, writes Carr, ‘came from 1919 onwards to dominate every aspect of Soviet financial and economic policy, and gave to the policies of war communism their final and characteristic shape’. The state increased requisi- tions and cooperatives became the state’s main collecting and distributing structure. By 1920 the gap between official fixed and free market prices widened alarmingly; ‘the list of fixed prices grew till almost every object of consumption was cov- 3 The main source for the discussion in this section is Carr 1966, pp. 136 – 50, 247 – 68, 343 – 57 along with Yurovsky 1995. Unless otherwise indicated, all quotes in this section, are from references in Carr. ered’. Rationing was extended as barter became attractive and frequent even factories paid suppli- ers and workers in products finished by them or by another factory with which it made exchanges in kind. Carr suggests that the phasing out of money was not an original aim of the Bolsheviks but that once money became ineffective ‘a virtue was made of necessity and the view became popular that the destruction of the currency had been a deliberate act of policy’. Most officials, including Trotsky quoted in Bettleheim, 1968, p. 60 and Stalin quoted in Rosdolsky, 1977, p. 130, expected a monetary economy to evaporate with the advance of communism. However, money remained a tool of state policy; Lenin pleaded with the peasants to accept the state’s tokens for their grain. For this reason, Krestinsky pointed out that ‘our ruin or salvation depends on a race between the decreas- ing value of money — with the consequent need for printing notes in ever greater quantities — and our growing ability to do without money altogether’. Observe the wording here. Krestinsky uses a logic opposed to Carr’s; the diminishing value of the currency forces the government to issue more notes rather than the reverse. Carr suggests that only the practical circumstance of run-away inflation forced them into introducing nonmonetary exchanges. Anyway, the role of money had now become an important issue; mate- rial circumstances were determining the political and theoretical agenda. While the second All-Russian Congress of Councils of National Economy, December 1918, passed a resolution condoning ‘the elimination in the last resort of all influence of money on the relations between economic factors’, the practical measures decided on involved settlements without cash but not without monetary accounting. Dis- cussion about eliminating money became espe- cially confused once the state supervised transactions in the industrial sector, so industry only needed cash to pay wages. This was under- stood as a step towards eliminating money. Not surprisingly banking officials thought only of monetary accounting but, especially once the unions organised wages in kind, monetary ac- counting itself seemed unnecessary. One contributor to the debate, cited by Carr, suggested that ‘we shall come in the end to doing without any calculations in rubles, reckoning the energy used by number of days and hours’. He, like Larin, who pointed out that now ‘the only question can be how many days must be spent to produce how many articles in a given branch of production’, anticipated the focus of future de- bate. Still, it was Milyutin who encapsulated the ambiguity and confusion in the debate over money and state affairs when he said that ‘a system without money is not a system without payments’ Initially it seemed obvious, especially to the conservatives, that ‘monetary symbols’ would remain even though ‘monetary tokens’ were becoming less necessary. In short, money would exist as a unit of account. And, if it is correct that this is money’s defining function, this effectively meant a system of monetary exchange would remain. As the depreciating ruble was less and less a stable unit of account, material circumstances de- termined that the role of money in its primary function as a unit of account would become the theoretical and political issue of the day. Accord- ing to Carr, the debate over substituting a mone- tary unit of account with one based on labour, in terms of time or energy expended, ‘occupied an enormous place in the economic literature of 1920 and the first few months of 1921’ and was influ- enced by Otto Neurath’s work. 4 At the January 1920 Congress, it was decided that accounts might involve a unit of labour, commonly referred to as tred [abbreviated from trudo6aya edinitsa]. This matter was passed on to a special commission and ‘occupied for many months the best economic brains of the country’. A unit of labour time was a familiar concept to readers of socialist literature and political economy, however, Carr’s comment here — that ‘it also seemed to be based on sheer common sense’ — is worth discussing. It had already been mooted in Russia that such a unit might eventuate in ‘a universal unit of account of living energy — the calorie’ the ened. However, this had no influence on Soviet accountants who 4 The pre-history of this subject is covered in a fascinating study by Juan Martinez-Alier 1987. persisted in reckoning in rubles; they followed official directions that reiterated the phasing out of cash but fell short of instructing a change from using the national currency as a unit of account. At this point a ‘return’ to a natural economy or advance to a moneyless communism was halted because all state industries were directed to follow khozraschet [‘principles of precise economic ac- counting’]; monetary taxes were demanded; cash was required for state-produced goods and ser- vices; state budgets were reintroduced; and local authorities regained financial independence. Such policies implied a renewed reliance on money as cash, not just as a unit of account. Lenin cited in Tablada, 1989 acknowledged that free trade would ‘inevitably’ result in ‘a revival of capitalist wage – slavery’ but spoke of the New Economic Policy as ‘retreating in order to make better preparations for a new offensive against capital- ism’. Carr seems correct to suggest that the fresh direction of the New Economic Policy, and its financial imperatives, amounted to a return to all of the fiscal, financial, banking and monetary orthodoxies of capitalism. Devising, implementing, monitoring and revis- ing an artificial price system for various assets, goods and services within an otherwise free mar- ket system for environmental reasons similarly risks being time-consuming, costly and vulnerable to avoidance tactics and corruption. Carr’s ac- count suggests that no discussion of assessing the various values of environmental resources oc- curred in the Russian debates. This was a matter of relative neglect in the Cuban case as well. However, these case studies indicate the kinds of social considerations ecological economists need to take into account when attempting to make prices or other economic policies reflect ecological values. 6 . 2 . Che Gue6ara and the question of money During 1963 – 1965, there was a great economic debate in Cuba with contributions from overseas. The debate concentrated on whether work ought to be encouraged by moral or material incentives and whether the state ought to adhere to a cen- tralised budgetary system or allow enterprises financial autonomy. Distinctive positions on these issues related to different interpretations of Marx’s concept and law of value and different visions of socialist planning. The debaters argued about whether production by the state constituted production of ‘commodities’. As with ecological economics, superficially the issue for the socialist revolutionaries was not so much where are we going, but how will we get there? In this debate Major Alberto Mora, Cuban Minister of Foreign Trade, and Carlos Rafael Rodrı´guez, Director of the National Institute of Agrarian Reform were supported by the French economist Charles Bet- tleheim in opposition to Che Guevara, Director of the Ministry of Industries. 5 Che 1987a, pp. 204 – 205 quoted from Marx in defence of his position; Che’ s ‘revolutionary hu- manism’ fundamentally distinguished his perspec- tive from that of his opponents Lowy, 1973. Following Marx, Che see Lowy, 1973 had de- cided that freedom meant freedom from the forces of the capitalist market, freedom from alienation, the freedom to directly control and plan human life. While acknowledging that investment must take account of non-economic factors, Mora in Lowy 1973 pp. 46 – 7 suggested that Marx’s law of value must not be neglected but, rather, found its most perfect expression under socialism This po- sition was not supported by Marx’s work, Mora’s definition of value being a rather conventional ‘relation between limited available resources and man’s sic increasing wants’. Furthermore, Mora argued that state enterprises should be financially autonomous, utilise business accounting methods of economic calculation, and produce commodi- ties for profits. The point made by Bettleheim 1968, p. 190 was that ‘if we try to apply forms of organisation and forms of circulation to the lower level of development attained by the pro- ductive forces, we shall achieve only a great deal of waste.’ In his commentary on the discussion, Lowy 1973 argued that without a market it was unclear what people wanted. 5 The main English sources for this discussion are various works by Che Guevara 1987a, 1987b, 1991 and the commen- taries in Lowy 1973 and Tablada 1989. In opposition to Mora and his supporters, Gue- vara followed Marx, stating that ‘value’ was re- lated to abstract labour, not to wants and environmental resources. He argued that in as much as the state sector of the economy approxi- mated a single unit and transfers of products between state factories were all supervised under one budgetary finance system, these products did not constitute commodities. Administered prices were not market prices nor could they be associ- ated with Marx’s law of value. This reasoning was applied to transactions between the private and state sectors too. For Che, the plan ought not mimic market forces; planning was the very pro- cess which enabled noneconomic factors to be taken into account and, being a conscious act, led away from the law of value. Guevara, 1987b wanted ‘to eliminate as vigorously as possible the old categories, including the market, money, and, therefore the lever of material interest — or, to put it better,’ he wrote, ‘to eliminate the condi- tions for their existence’. Che 1987a, pp. 214, 229 believed that ‘the development of conscious- ness can advance ahead of the particular state of the productive forces in any given country’. Man- del Lowy, 1973 supported Che; planning ought to minimise both the working of the law of value and the commodity character of the state workers’ product. Che distinguished himself from Stalinist bureaucratic planning and opposed the competi- tive aspects of the Yugoslavian model. For Che and Mandel, centralised budgetary planning would minimise expensive bureaucratic management. The other main question in this debate focused on the relative merits of material and moral incen- tives. Not surprisingly, Che Guevara was the pro- tagonist for encouraging work through moral incentives, while his opponents argued that mone- tary incentives were absolutely necessary. Gue- vara, 1991 in Lowy, 1973 argued that use of capitalism’s ‘fetishes’ or ‘the worn-out weapons left by capitalism’ i.e. profit, material incentives and so on would result in a ‘dead end’, not in communism; what was necessary was a new atti- tude, a sense of social duty, a collectivist con- sciousness, a new ‘man’. He was pragmatic enough to recognise that such changes do not occur overnight. One policy involved phasing out material incentives and focusing social benefits on exemplary workers in social[ist] fields and main- taining minimal wage differentials in accordance with various skills. Guevara emphasised educa- tion in creating a new consciousness. His faith in the viability of voluntary cooperative labour was based on his political experience of popular mo- bilisations which had produced results that demonstrably surpassed those observed when ef- fort was individually rewarded. The general public was much more engaged by the debate over incentives and voluntary labour than that over financing. According to Dumont in Lowy, 1973 Guevara criticised monetary re- wards given to Soviet workers and likened them to North American employees. For Che 1987b voluntary labour involved breaking down the mentalmanual duality and creating a spirited, cooperative culture. Like Marx, Che conceived of voluntary labour as the pinnacle of a nonalien- ated existence and the expression of a truly fulfi- lled human. Che’s detailed and complex budgetary finance system certainly exhibited more collective human control over production and distribution than occurs in a free market or in the economic ac- counting methods of his opponents in Cuba. Tablada 1989 lauds Che’s ‘model’ system as ‘an original contribution to the theory of the transi- tion period’, and as ‘the driving force behind new forms of human relations and communist con- sciousness.’ Che 1987a, p. 220 himself wrote that: ‘‘centralized planning is the mode of existence of socialist society, its defining characteristic, and the point at which man’s consciousness finally succeeds in synthesizing and directing the economy toward its goal: the full liberation of the human being within the framework of communist society.’’ However, he stressed that Cuba was only in the first phase of a transition to communism and deplored the lack of relevant Marxian theory on this matter. Significantly, Che’s budgetary system did not do without money as a unit of account. Enter- prises simply had no cash for investment because finance was centrally organised. The banker be- came an administrator. Money was still ‘an eco- nomic indicator’ Tablada, 1989 and ‘a unit of analysis’ Guevara, 1987a, i.e. a standard of price or measure of value. Castro in Habel, 1991, p. 47 accurately represented Guevara’s position when, much later in 1987, he claimed that: ‘‘If there was one thing Che paid absolute attention to, it was accountancy and the analy- sis, cent for cent, of expenses and costs…Che used to dream of using information technology to gauge economic efficiency under socialism and saw this as essential.’’ Furthermore, as Tablada 1989 points out, but without observing the obvious contradiction, Guevara was impressed by the efficient adminis- tration of the most advanced imperialist monopoly enterprises. Indeed Che 1987a, p. 209 felt that their economic methods could be used ‘without fear of being ‘infected’ by bourgeois ideology’. The adoption of advanced, capitalist, technology was viewed in a similar way. Gue- vara’s model was highly centralised and super- vised by a politicised elite who still took world market prices into account when setting prices that related to organising Cuba’s production. Guevara did not indicate how this system might lead to the state devolving its powers over pro- duction and distribution to the people directly or to a stage where a unit of account like money would not exist at all. Guevara did suggest that the latter eventuality relied on the progress of socialism internationally and presented ideas about the terms of exchange between socialist countries that might be followed meantime. Later, Castro cited in Lowy, 1973 seemed to wholly support his positions, claiming that ‘we want…to de-mystify money, not to rehabilitate it’ and that, ‘[w]e even propose to abolish it altogether.’ But, by then, Che had suffered a resounding defeat in the great economic debate, a defeat that had given him reason to leave Cuba altogether. Neither the Cuban nor the Soviet debaters ex- plicitly made the issue of transferring power to the grassroots a central one. The retention of a state structure and the use of money went hand in hand. State planning of the economy and regula- tion of the distribution of goods and services seemed to require some kind of money, at least as a unit of account. In such situations products retain some of the characteristics of commodities and workers are likely to be remunerated in wages, or at least a package of goods and services quantifiable by way of a single unit. Bettleheim 1968 argued that Soviet commu- nism equated to state capitalism precisely because it adopted monetary economic calculation; transi- tional societies cannot avoid the influences of world prices and foreign trade unless they resort to autarchy or self-sufficiency. We are returned, then, to the arguments of nonmarket socialists regarding the challenge for broad scale change that a global society constantly engaged in mone- tary exchange of goods and services creates. For all ecological economists too — whether they consider reforms within capitalism sufficient to bring ecological concerns within the realm of the economy, or argue for another system — this international, not just national or local dimension for change remains a challenge.

7. Conclusion